In this era of globalization, small medium-sized fast-growth enterprises are central and pivotal to economic growth and prosperity, and firms that grow are most likely to survive, become successful and be competitive. Significant variables have been identified to impact on the growth of SMEs. The key influential factors of business growth include elements drawn from the entrepreneur and their resource variables. However, the influence of the external environment relative to the growth of SMEs, though imperative in the academic inquiry, has not been studied extensively particularly in the case of developing economies. It is against this backdrop that this thesis seeks to fill this knowledge gap by inquiring into the factors that affect the development and growth of SMEs in the context of a developing African country, Ghana. The thesis draws mostly on three research approaches to SMEs growth organized on analytical distinctions between the entrepreneur and their resources, the business level and the business strategy. At the empirical level, the research makes use of 75 SMEs owner/managers in Ghana in investigating the subject in detail. The study uses thematic analysis to analyse the interview transcripts.
Findings indicate that the development and growth of SMEs was greatly influenced by the level and cost of energy (electricity) supply. The erratic energy supply with its huge tariffs, and resulting in acute energy crisis constrains business performance and pushes a host of SMEs out of business. The findings further show that government policy on taxes greatly affects the development and growth of SMEs. Unfavourable tax policy where businesses are taxed at the local government level as well as the national level, and high customs duties constrain the development and growth of SMEs. The findings, again, unravel that competition influences the performance of SMEs; hostile competition from direct and indirect foreign activities (imports) adversely affect the entrepreneurial activities of local producers. The study also shows that economic factors greatly influence the development and growth of SMEs. Sustained inflation adversely affects the operations cost of businesses, suppresses profit levels and ultimately inhibits expansion through plough-back profit. The study disputes the influence of the adoption and use of web technology (e-commerce) identified in literatures, but affirms the influence of education, while new factors are identified, showing that context impacts on the development and growth of SMEs. The study recommends sustained and affordable energy supply, measures to control or defuse hostile competition, review lending and borrowing regulations, review tax policies and suppress sustained inflation. This study therefore enhances the ongoing development relative to the understanding of factors that affect the development and growth of SMEs. More significantly, the role of context is of essence in SMEs research and entrepreneurship as a whole.

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This thesis was submitted for the award of Doctor of Philosophy and was awarded by Brunel University London.